How One Lawyer’s Violation of the Ethical Rules on Fee Billing Can Affect Others in the Firm

[This is another post in a series of blog posts discussing how specific ABA Model Prof. Conduct Rules (RPC) impacts how lawyers can and cannot bill their fees and costs.]

In all prior posts, I pointed out that violations of the RPC with regard to billing can have consequences for the billing lawyer ranging from a reprimand to disbarment.  See, e.g.,  In re Disciplinary Proceeding against Vanderbeek, 101P.3d 88 (Wash. 2004)(disbarment for bill padding); In the Matter of Jerome Berg, 3 State Bar Ct. Rptr. 725 (Rev. Dept. 1997) (attorney disbarment for unethical billing).

In this blog post,  I wanted to note that RPC violations can also have consequences for supervising attorneys including managing partners, “innocent” partners, and even subordinate attorneys. In my prior on an attorney who billed fake hours, I reported on the case of People v. Mary Jaclyn Cook, 17 PDJ 051(Colo. August 10, 2017). Cook was suspended from the practice of law for, inter alia, preparing to bill time she did not work.

In case you failed to notice it, Ms. Cook was reported to the state disciplinary authorities, not by any of her clients, but by supervising attorneys in her law firm. The reporting of misconduct by other lawyers in Ms. Cook’s law firm calls attention to the fact that lawyers can have a mandatory duty to report the misconduct of other lawyers. See ABA Annotated RPC, Comments to RPC 8.3 at p. 663 (“Although Rule 8.3 does not require a lawyer to report his or her own misconduct, the lawyer must report the misconduct of others.”).

Supervising attorneys including managing partners liability for attorney discipline stems not only from the actual knowledge they may have of the misconduct of another lawyer in the firm,  but also if they are in a position, failing to take action to “mitigate” the damage caused by the offending attorney. See In re Marshall, 394 N.W.2d 790 (Minn. 1986)(Failure to take reasonable remedial action to avoid or mitigate consequences of law partner’s misconduct is grounds for discipline).

In my audit reports, I will often see evidence of a possible ethics violation. When this occurs, I always recommend in my audit reports (and in my The Definitive Guide to Resolving a Legal Bill Dispute©), that the matter be discussed with the firm’s managing partner.  Discussion (and documenting the discussion) of a possible RPC violation with the managing partner puts the ball squarely in the managing partner’s court. For the managing partner now has a mandatory duty to investigate and if necessary, “mitigate” (i.e., fix) the problem. He may also have a duty to report the billing attorney to the state’s disciplinary authorities.

In my next post,  I will discuss the consequences for subordinate staff including associates, paralegals, and legal assistants or legal secretaries when their supervising attorney violates the RPC when it comes to billing for fees and costs.

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